Following representations from stakeholders, the Reserve Bank of India (RBI) has given an extension of three months for select provisions relating to activation of credit cards and their limits.
These provisions will now come into effect from 1 October 2022. They were earlier to be implemented from July 1, 2022.
The provision has been extended to make it mandatory for card issuing banks or institutions to obtain One Time Password (OTP) based consent from the cardholder for activating the credit card, if it has been made by the customer himself for more than 30 days. Has not been activated for a long time. date of issue.
If no consent to activate the card is received, the card issuer shall close the credit card account at no cost to the customer within seven working days from the date of receipt of confirmation from the customer, the provision further states.
The Indian Banks’ Association (IBA) had earlier sought an extension of six months on the changes in the master instructions for cards, however the RBI in a notification issued today said that considering the requests of the association, the implementation of the provisions has been extended Is. for three months.
Another provision that has been extended states that the card-issuer shall ensure that the credit limit sanctioned and advised to the cardholder is not breached at any time without the explicit consent of the cardholder.
In addition, there shall be no capitalization of unpaid fees, levies or taxes for recovery or compounding of interest, the provision further states.
However, no extension has been provided to the provisions relating to co-branding, which limit the role of co-branding entities for marketing and distribution of credit or prepaid cards.
This provision, which will come into effect from July 1, 2022, states that the co-branding partner shall not have access to information relating to transactions done through the card.